Atom Bank raises $206 million as major backers raise their stakes

Reuters Staff

2 Min Read

LONDON (Reuters) - Britain’s Atom Bank has raised 149 million pounds ($207 million) in a funding round that saw its main backers Spanish lender BBVA and London’s Toscafund Asset Management raise their stakes, the app-based bank said on Wednesday.

Atom, which provides savings accounts and mortgages through a smartphone app, said it would use the funds to continue to drive growth and invest in technology and business capabilities.

BBVA, which has made significant investments in a number of financial technology firms, contributed 85.4 million pounds to the round, increasing its stake in Atom to 39 percent subject to regulatory and shareholder approval. Toscafund invested 54.4 million, also boosting its stake.

“This further significant investment of capital secures the bank’s place as a disruptive force in the mainstream of UK banking,” said CEO Mark Mullen.

Atom is one of a string of digital banks with no physical outlets that have sprung up in Britain in recent years, hoping slick technology and cut-price fees can help them vie for market share from big, established lenders.

They have enjoyed growing interest from the public and investors as new financial services rules come into play to boost competition from smaller players across the UK and Europe.

To date, Atom has loaned 1.2 billion pounds to businesses and homeowners in the UK.

Its founder and chairman Anthony Thomson, who previously co-founded Metro Bank, stepped down from in January, saying he was ready to leave Atom after turning a big idea into an established lender.